The International Finance Corporation, the lending arm of World Bank, is reportedly all set to invest around ₹64 crore ($10 million) in online insurance startup Coverfox.
In a disclosure, IFC said that the Mumbai-based startup will use the funds to grow its business-to-business-to-consumer (B2B2C) segment.
Earlier this year, there were reports suggesting that Coverfox is looking to raise around ₹96 crore from existing investors including SAIF Partners, Accel India, and Catamaran Ventures – the family office of Infosys cofounder NR Narayana Murthy.
People aware of the development, who remains unnamed, says that if the deal goes through, it will be a part of a bigger funding round that will value the company at around $70 million to $100 million.
The proceeds of the funding round is likely to help the company boost term life insurance on its platform. We recently reported that Coverfox is now shifting its focus towards term life insurance business, which currently contributes less than 1% of the entire revenue pie, with most of the topline being generated by motor insurance policies that the startup aggregates.
Coverfox, founded by Devendra Rane and Varun Dua in 2013, gets higher commission rate of around 20-25 percent in life insurance business compared to 12-15 percent it rakes in through motor insurance. The firm is looking to grow the quantum of life insurance policies sold monthly from the current 500 to 5,000 by March 2018.